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FDIC Federal Register Citations

First PREMIER Bank

From: Alan Graff [mailto:AGRAFF@firstpremier.com]
Sent: Tuesday, September 13, 2005 1:01 PM
To: Comments
Subject: RIN 3064-AC91


RIN 3064-AC91
Proposed Amendments to Part 363 - Annual Independent Audits and Reporting Requirements

Submitted by:
Alan Graff, Vice President, Risk Management
First PREMIER Bank
601 S. Minnesota Avenue
Sioux Falls SD 57104
(605) 357-3083

First PREMIER Bank appreciates the opportunity to discuss the merits associated with the proposal to reduce the burden on community banks for certain management and external auditor reporting requirements.

First PREMIER Bank is a $500 million community bank operating with thirteen branches in Eastern South Dakota.

Proposal

FDIC's proposal seeks to raise the threshold under Part 363 of its regulation from $500 million to $1 billion for certain specific elements, including:

  * Internal Control Assessments by Management
  * Examining and Attestation of Management's Assertions on Internal Controls by External Auditors
  * Requiring Outside Directors Serving on the Audit Committee be Independent of Management

First PREMIER Bank concurs that the above threshold change would provide meaningful burden relief without sacrificing risk to the banking system or the FDIC insurance fund. As stated in the proposal, by raising the threshold to $1 billion, assets of insured institutions that remain covered by the above elements of Part 363 would only drop 400 basis points to 86% of industry assets. In addition, the $1 billion threshold should be adjusted annually based upon changes to the Consumer Price Index to remain consistent with the Community Reinvestment and Home Mortgage Disclosure Acts.

First PREMIER Bank recognizes the importance of internal controls understands that if this proposal is accepted, it would not relinquish management of its responsibility to maintain a strong system of internal controls. Audit committees of institutions impacted by this proposal will still require accountability of management, however the regulatory burden associated with external oversight and reporting would be relieved.

First PREMIER Bank concurs with retaining the position requiring external audits of insured institutions over $500 million to ensure integrity of financial reporting. With the complexities of banking activities, even for smaller institutions, the use of external accountants is essential to ensure accurate financial information.

Finally, relief from requiring outside directors be independent of management provides more flexibility to attract and retain qualified directors that know and understand the banking system, but are disqualified under current rules due to some link to the institution.

First PREMIER Bank applauds the FDIC for continuing to seek out meaningful ways to ease the regulatory burdens on community banks without sacrificing safety and soundness.

Respectfully submitted,

Alan M. Graff
Vice President, Director of Risk Management
First PREMIER Bank
Sioux Falls South Dakota

 


Last Updated 09/14/2005 Regs@fdic.gov

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